Any joy investors feel about the strong returns from Australian shares in the 2025 financial year (FY25) may be short-lived.
The S&P/ASX 200 index rose 10.2% in the 12 months ending 30 June, the best outcome since 12.4% in FY21, bettering 7.5% in FY24 and representing a 16% rebound from lows touched in April when worries about United States tariffs were raging.
However futures trading suggests the market will start the new fiscal year slightly lower with the S&P/ASX 200 share price index (SPI) September contract quoted just six points (0.07%) below the previous settlement at 8,531 points at the time of writing.
This was despite two United States stock indices reaching record highs on Monday (Tuesday AEST) as hopes for trade deals and possible rate cuts eased investor uncertainty.
“A relatively flat start is expected in Australia today with SPI features pointing down by six points,” Chief CommSec Economist Ryan Felsman said.
“The soft start to the new financial year is despite the fact we did see Wall Street at record highs last night.”
The Dow Jones index rose 0.6% while the S&P 500 and Nasdaq Composite both added 0.5% to reach new peaks.
"Animal spirits seem to have taken hold here," Westchester Capital Management co-president Roy Behren was quoted in a Reuters story as saying.
"It is also quite common for the last couple of days of a quarter to see strength because of the window dressing."
The Australian sharemarket closed higher on Monday with the S&P/ASX 200 Index gaining 0.3% higher to 8,542.3.
Felsman said falls in commodity prices overseas could undermine oil and iron ore producers' share prices on Tuesday but this may be offset by strength in financial stocks as investors seek Australian banks' safe haven.
On Australian fixed interest markets, yields followed the U.S. downward trend with 10-year Treasury bonds down 0.19% to 4.150% and two-year bonds off 0.56% to 3.211%.
